Will Tui get back on its feet financially after the Corona problems? With the issue of new shares, the group wants to return further parts of the state aid. Now a good summer is crucial.
With fresh money from its owners, Tui wants to regain a further piece of independence from state aid from the Corona crisis. The world’s largest tour operator is also hoping for stronger summer business again.
This and a new capital increase through the issue of additional shares are intended to secure the financial basis – and at the same time reduce the scope of tax-financed support again.
On Tuesday evening, after the approval of the supervisory board, the group announced that it would place up to 162.3 million securities on the financial market. The proceeds from this issue would then “flow into the full repayment of the German state’s silent contribution 2”, as it was said in Hanover. On Wednesday night, Tui finally announced gross proceeds of around 425 million euros. The new shares are therefore priced at EUR 2.62 each. The offer is only aimed at large institutional investors.
The market reacted sceptically at first. The Tui share lost 10 percent in early Xetra trading, around noon the minus was still at a similar level. An analyst said, for example, that there were still risks to Tui’s liquidity. A colleague wrote that the travel group had to continue to reduce debt despite the capital increase.
Partial package with 671 million euros
The state aid that the company wants to return with the latest step is a partial package worth 671 million euros. The federal economic stabilization fund (WSF) made it available when Tui had come under considerable pressure in the pandemic due to collapsing business. Tui also wants to reduce a credit line from KfW by another 336 million euros – this would then be a good 2.1 billion euros.
In the wake of the virus crisis, the Hanoverians had already increased their capital several times and also given up the first loan packages. Larger parts of it served as a kind of reserve, but were not used. Nevertheless, there was also criticism of the aid: Some observers considered it excessive compared to what smaller companies got. At the same time, Tui continued the austerity course.
The long-time main shareholder Alexei Mordashov had also participated in earlier capital increases. After the start of the Ukraine war, the Russian oligarch withdrew from the circle of Tui owners, the role of his shares is unclear. According to reports, his current wife, Marina Mordashova, was named as the “controlling shareholder” from those close to the ex-grand owner. The EU included Mordashov himself on its sanctions list.
Booking growth expected in summer
At the beginning of May, Tui – including the credit lines – had 3.8 billion euros in financial resources. The net debt was just over a month earlier at around 3.9 billion euros, they had recently fallen significantly. CEO Fritz Joussen reported strong booking growth for the important summer of 2022. After two years of the Corona travel lull, Tui is dependent on higher demand.
Last week, Joussen announced additional measures to reduce state aid in the interim report for the winter half-year (October to March). Regarding the placement of the new shares, he now explained: “Our goal is to return to normal as quickly as possible. We are in stable waters, the market is intact and we are expecting a good financial year.»
In April, the group had just reduced the funds provided by the federal government and private banks to combat the financial consequences of the corona virus by around 700 million euros from almost 4.3 billion euros. In addition to the remaining EUR 2.1 billion KfW credit line, there would be a second silent participation (EUR 420 million) after the planned repayment, as well as the convertible bond issued some time ago, which the federal government can exchange for shares (EUR 59 million). . The shares planned from the new issue should make up up to one tenth of the share capital.